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Holding the GST compensation amount till settlement means no other expenditure

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Holding the GST compensation amount till settlement means no other expenditure

Holding GST compensation amount

Holding the GST compensation amount till settlement means no other expenditure

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Sources within the Finance Ministry have countered the CAG’s assessment of the states’ share of expenditure of Rs 47,272 crore in (Goods and Services Tax) GST¬†compensation amount on other items. He said that temporarily withholding the quantity of compensation funds for settlement for a few times doesn’t mean that the middle should spend it elsewhere. The Comptroller and Auditor General of India (CAG) said in its latest report that the Central Government improperly withheld an amount of Rs 47,272 crore of GST compensation within the first two years of implementation of the products and Services Tax (GST) regime. Sources within the ministry said that full compensation has been paid to the states for 2017-18 and 2018-19.

He said that the time taken to settle the compensation receipts can’t be said that the GST cess fund has been used elsewhere, even when the whole amount of the states’ share is being released by the central government. Sources said that in 2017-18, Rs 62,611 crore was deposited within the GST Compensation Fund. Out of those, the Central Government paid the whole amount of 41,146 crores of their share to the States and Union Territories. Similarly, out of the Rs 95,081 crore deposited in 2018-19, the states and Union Territories were paid the complete amount of Rs 69,275 crore of their share.

He said that after paying the whole amount of the share of the states and union territories, the gathering of 2017-18 and 2018-19 for settlement was left at Rs 47,271 crore. He said that in 2019-20, the central government paid GST compensation of Rs 1,65,302 crore to the states and union territories, while the gathering in GST compensation fund during this era was just Rs 95,444 crore. This payment might be made thanks to this because the central government also used the remaining Rs 47,271 crore in it. The GST Act guarantees compensation to the States and Union Territories within the event of 14 percent annual increase and reduces in revenue from the tax for five years after the new taxation comes into force from July 2017 within the country.

This provision was enacted to supply relief to the States within the event of GST being imposed on the loss of tax collections. So as to catch up on this deficiency within the GST legal system, a cess has been made on goods/services considered to be harmful to luxury and society. the quantity received from the cess is employed by the central government to pay GST compensation to the states. Sources say that since the cess collected by the govt has been used for the complete payment of the acceptable compensation, it can’t be alleged that the remaining cess amount has been used for other sponsorships.

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Anurag Srivastva
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